Paying Debt With More Debt

Money is so cheap right now that many states are borrowing to pay off old debt. From a fiscal perspective this makes total sense; you exchange debt at a high interest rate for debt at a low interest rate.

The problem is rates cannot go any lower, so at this point the states are naturally going to load up on cheap money knowing it will be more expensive later. So states are taking on even more debt simply because of the rate - any sense of fiscal discipline is out the window. The low rate encourages states to spend to the limits of liberal imaginations, and that is not a good thing.

We're going to see states so heavily leveraged, with dubious likelihood of paying the borrowed money back. This is the perfect opportunity to cut costs, but that will never happen with fiscal liberals (Democrats or Republicans) in power.

I don't see how these states can remain solvent 5, 10, or 15 years from now given current projections for revenues vs expenditures.

Unless of course the states' budgets are federalized...